Project Costing Reconciliation Made Easy

Sachin Singh Deloitte Consulting LLP

July 20th, 2012

Agenda
Introduction Problem Definition
Oracle Project Costing Data and Accounting flow Existing Process for Projects Reconciliation

Case Study
Background Solution Benefits

Q&A

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Disclaimer

This presentation contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this presentation, rendering business, financial, investment, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this presentation.

Project Reconciliation Made Easy

Copyright 2012 Deloitte Development LLC, All rights reserved.

Introduction

IntroductionThis presentation will.

a b c d
Explain the limitations in handling an operational process. Explain data and accounting entries flow in Oracle Project Costing Explain the need for custom reconciliation solution. Case Study: How to utilize a custom solution to meet reconciliation needs.

Project Reconciliation Made Easy

Copyright 2012 Deloitte Development LLC, All rights reserved.

Problem Definition
The key issues company faces with the reconciliation of Oracle Project Costing with Oracle General Ledger are: Multiple reports are used for reconciliation with limited visibility of all type of costs in Oracle Project Costing. Non-availability of a standard report, which can provide visibility of the costs directly booked in General Ledger therefore losing the visibility of Project details. Non-availability of a standard report, which can provide the accounting information of the Project costs directly booked in Oracle Project Costing when comparing it with the costs booked in General Ledger. Non-availability of a standard report , which could convert details of all the Project costs in the accounting format for comparison and reconciliation purpose.

Project Reconciliation Made Easy

Copyright 2012 Deloitte Development LLC, All rights reserved.

Oracle Project Costing Data Flow

iProcurement

Purchasing

General Ledger

Inventory/OPM

Payables

Oracle Project Costing

Fixed Assets

Project Reconciliation Made Easy

Copyright 2012 Deloitte Development LLC, All rights reserved.

Oracle Project Costing Accounting Flow

Payables General Ledger Project Costing Fixed Assets

Project Costing

General Ledger

Cost flowing from Payables to Projects

Cost flowing from Projects to Fixed Assets

Manual JE in GL

Accounted Transactions in Projects

Accounted entries in Projects not interfacing to GL

Entries in GL without project details

Project Reconciliation Made Easy

Copyright 2012 Deloitte Development LLC, All rights reserved.

Existing Process for Project Costing Reconciliation

Reports available within EBS AUD: Project Subledger: Detail by Expenditure Type(Oracle Project Costing) AUD: Project Subledger: Detail by Project (Oracle Project Costing) AUD: Project Subledger Summary (Oracle Project Costing) Account Analysis report (Oracle General Ledger)

Steps for reconciliation Execute AUD: Project Subledger report. Execute Account Analysis report in General Ledger. Download both reports and reconcile each accounting combination.

Project Reconciliation Made Easy

Copyright 2012 Deloitte Development LLC, All rights reserved.

Case Study

Background
Client is a leading biopharmaceutical company from the Life Sciences Industry. Client was using out-of-the-box solution to track costs using Oracle Project Costing.
o All cost centers related to R&D department uses Projects for tracking their 100% of the cost through Oracle Project Costing

Client was using following non-oracle systems :

o Time Entry system o Payroll calculating and generating system o Expense re-imbursement system o Clinical trial payment system

Client was using Oracle Project Costing for tracking actual allocations from different cost centers (performed in GL) and depreciation of the fixed assets purchased for the departments.

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Project Reconciliation Made Easy

Copyright 2012 Deloitte Development LLC, All rights reserved.

Solution.Reporting Needs

Projects
Project Expenditure Type Expenditure Organization Location Amount Projects Source

General Ledger
Natural Account Cost Center Location Amount General Ledger Source

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Project Reconciliation Made Easy

Copyright 2012 Deloitte Development LLC, All rights reserved.

Solution.Reporting Needs
Created three layouts for providing reconciliation information: Layout1 Summary layout to provide executive level summary at the cost center level. Created following detailed layouts to provide:
o o Layout2 Detail information without Project Code for Accountants. Layout3 Detail information with Project Codes for Project Controllers and Project Accountants.

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Project Reconciliation Made Easy

Copyright 2012 Deloitte Development LLC, All rights reserved.

Solution.Layout1
Summary Layout (Layout1) has following key features:
The report output fulfills the requirement of presenting all related costs for the cost centers flowing to General Ledger from Project Costing. The report output has two sections: Projects and General Ledger. Each section provides summarized cost comparison between Project Costing and General Ledger at the cost center level. The summary layout is convenient for the users at the executive level.

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Project Reconciliation Made Easy

Copyright 2012 Deloitte Development LLC, All rights reserved.

Solution.Layout2
Detail Layout (Layout2) has following key features:
The report output fulfills the requirement of presenting all related costs for the cost centers with additional details (e.g. Source, Expenditure Type, etc.) The report output has two sections: Projects and General Ledger The report compares the Expenditure Type in Projects with Accounts in GL. The report compares the Expenditure Organization in Projects with Cost center in GL.

The report compares the cost at the expense source level.

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Project Reconciliation Made Easy

Copyright 2012 Deloitte Development LLC, All rights reserved.

Solution.Layout3
Detail Layout (Layout3) has following key features:
The report output fulfills the requirement of presenting all related costs for the cost centers by Project Number. Project Number is shown in the report to further drilldown on Projects. The layout helps in identifying the reconciliation differences at the Project Code level.

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Project Reconciliation Made Easy

Copyright 2012 Deloitte Development LLC, All rights reserved.

Benefits
The custom reconciliation process helps to reduce time and effort during period close. This solution presents the information in user-friendly layout therefore allowing for easy navigation. Single source of truth review all costs and transactions related to Oracle Project Costing and compare to General Ledger without running multiple reports. The reports can run at Cost Center, Natural Account, and Source level which allows flexibility for data comparison. Compares the information at the accounts level with the Project Code therefore meeting needs for cross-functional users in the organization (Executive, Project Manager, Project Controller and Accountants)

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Project Reconciliation Made Easy

Copyright 2012 Deloitte Development LLC, All rights reserved.

Questions
Contact Information: Sachin Singh Sr. Consultant, Deloitte Consulting LLP sachsingh@deloitte.com 650-576-4826

As used in this presentation, Deloitte means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitt e.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries

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Project Reconciliation Made Easy

Copyright 2012 Deloitte Development LLC, All rights reserved.

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Project Reconciliation Made Easy

Copyright 2012 Deloitte Development LLC, All rights reserved.